STRATEGIC PLANNING AND MANAGEMENT OF SMES

STRATEGIC PLANNING AND MANAGEMENT OF SMES

Author: Alexandru Bogdan Bota

Tutor: D. Juan Darocha Huerta

DEGREE IN ADMINISTRATION AND BUSINESS MANAGEMENT

AE1049 – FINAL DEGREE PROJECT

COURSE 2016-17

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INTRODUCTION ............................................................................. 4

1. OBJECTIVES .............................................................................. 5

1.1 General objectives ..................................................................................... 5

1.2 Specific objectives ..................................................................................... 5

1.3 Justification ................................................................................................ 5

2. METHODOLOGY ........................................................................ 5

2.1 Strategic plan .............................................................................................. 6

2.1.1 Internal analysis ...................................................................................... 8

2.1.2 External analysis ................................................................................... 10

2.1.3 SWOT ...................................................................................................... 14

2.2 Presentation of the Scorecard ................................................................ 15

2.2.1 The scorecard perspectives ................................................................. 15

3. DEVELOPMENT OF THE STRATEGIC PLAN ......................... 21

3.1 Internal analysis ....................................................................................... 21

3.1.1 History .................................................................................................... 21

3.1.2 Mission ................................................................................................... 21

3.1.3 Vision ...................................................................................................... 22

3.1.4 Values ..................................................................................................... 22

3.1.5 Organization chart ................................................................................. 22

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3.1.6 Working of the structure ....................................................................... 23

3.1.7 Description of the jobs .......................................................................... 23

3.1.8 Offered service ...................................................................................... 25

3.1.9 The technology of the company .......................................................... 26

3.1.10 Analysis of the chain value ................................................................ 26

3.1.11 Financial analysis ................................................................................ 29

3.2 External analysis ...................................................................................... 30

3.2.1 PESTEL .................................................................................................. 30

3.2.2 Analysis of Porter's Five Forces Model ............................................... 40

3.3 SWOT......................................................................................................... 41

3.4 Strategic objectives.................................................................................. 44

3.5 Description of the proposed objectives ................................................. 45

3.6 Strategic Map ............................................................................................ 47

3.7 Strategic indicators .................................................................................. 48

3.8. Balanced Scorecard of “MONTADITOS S.L.” ....................................... 54

4. CONCLUSIONS ........................................................................ 56

5. REFERENCES LIST ................................................................. 57

6. BIBLIOGRAPHY ....................................................................... 59

7. FIGURES AND TABLES ........................................................... 60

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INTRODUCTION

According to data from the Central Directory Business (2014) in Spain the 99.88% of

the industry are SMEs. These organizations must devote significant resources of time,

energy and human and financial resources to measure the work they carry out to

achieve the strategic objectives.

In recent years SMEs have been affected their business mainly due to the financial crisis,

which started in 2008, disappearing almost 250,000 SMEs and more than 300,000 self-

employed since then to the present day, according to data of the Ministry of Industry. As

a result many of these companies have had to adapt to the new situation which the

country to survive and not disappear.

The aim of this project is to make the strategic planning for an SME using the balanced

scorecard (BSC) as a tool. Lumpkin and Dess (2003) “understand by the meaning of the

strategic planning, the set of analysis, decisions and actions that an organization takes

out to create and keep advantages comparative sustainable along the time”.

The Balanced Scorecard, is a tool created by Kaplan and Norton at the beginning of the

90s, which allows to develop a comprehensive strategic management. According to

Kaplan and Norton (2000) 'the financial gauges were insufficient to bring companies to

success strategies and past returns, but they did not offered future indicators'. So

therefore, they created indicators which were classified in 4 different perspectives that

reflect the total value of growth that companies have in a given period, without leaving

aside finances that are essential when measuring success.

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1. OBJECTIVES

1.1 General objectives

The aim of this project is to make the strategic planning for an SME belonging to the

catering sector, taking into account a balanced scorecard.

1.2 Specific objectives

The specific objectives which are intended to achieve the use of the balanced scorecard

are, on the one hand, to identify the current situation in which the company is both from

the internal and the external perspective. On the other hand, to define a few strategic

objectives, to classify them and to monitor them through a few indicators, with the

purpose of improving the operating of the company.

1.3 Justification

The project that is being carried out is based on an existing business which is located in

Benicássim, but for reasons of confidentiality will have the name of 'EL MONTADITO

S.L.'

The Catering Sector has been chosen and more specifically this company for the

following reasons:

Easy to come and go to get information.

By the personal desire to open a restaurant with similar features in the future.

Gastronomy is one of the main attractions in this country, and also one of the

reasons because of tourists come on holiday, making it an added value that

differs from other destinations.

2. METHODOLOGY

In carrying out this work has been used a tool called the balanced scorecard for the

construction of a strategic plan, its implementation and follow-up monitoring to observe

the fulfilment of the objectives.

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2.1 Strategic plan

Strategic planning can be defined as a process to determine how a company can make

the best use of their resources in the future. In addition, it answers questions such as:

what do we do?, for who we do it?, and how do we do it?

According to Chandler (1962) 'the definition of the goals and long-term objectives of a

company, the adoption of actions and the allocation of the resources necessary for the

achievement of these objectives'.

Since the strategy is based on the way to achieve a particular purpose, the strategic plan

is the projection into the future of what we want to achieve quantitative manner and a

way to get it in a certain period. The objective of the strategic plan is to trace the path

that points us steps to achieve our goals by turning ideas into actions. In order to the

strategic will be successful, all phases must be interconnected since even having a very

well-formulated strategies not serving anything if they are not implemented in an

appropriate way.

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The stages of a strategic plan are as follows:

1. Strategic analysis 2. Formulation of strategies 3. Implementation strategies.

Figure 1: The Strategic Management Process

Source: Own Elaboration from La Dirección Estratégica de la Empresa: Teoría y

Aplicaciones (2007)

Strategic analysis

It can be considered the starting point of the strategic plan. It consists of the previous

study to be carried out by the company in order to formulate and implement appropriate

strategies. The first part of the strategic plan consists of the following processes: it is

necessary to analyse the vision, the mission and the strategic objectives of a company.

The question what is our raison d'être? It responds to the mission of the company, where

we want to go? It is the vision of the company and finally the question What we want to

do? Responds to the strategic objectives that a company has. We will then analyse the

opportunities and threats that occur in the environment, also called external analysis. It

is to examine the external factors affecting the company such as: political factors,

economic, technological, social, all competitors and organizations that can threaten the

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success of the company. Once studied the environment we pass to analyse on an

internal way our company where we identify the strengths and weaknesses that affect

our company. Later analysed both areas affecting the company will be a diagram of

strengths, weaknesses, opportunities, and threats called SWOT where we capture all

the information previously collected.

2.1.1 Internal analysis

To respond to the issues raised by the strategic plan, first it will need to establish certain

premises which they are composed by, they are:

Mission, vision and values of the company

These aspects define the purpose of the organization, they delineate what the

organization wants to be in long-term and also shows the beliefs shared by the members

involved establishing the bases for decision-making.

Strategic maps and goals

The strategic map is the set of strategic objectives that are connected through cause-

effect relationships between objectives, the indicators, the minds, managers ordered in

the four prospects. They help us to understand the coherence between the strategic

objectives and allows us to view in a graphic way the company's strategy.

Indicators and goals

The indicators are the means used to visualize if the strategic objectives are met or not

while the goals are what you want to get to an indicator in a given period of time.

There are two kinds of indicators:

Outcome indicators: measuring the achievement of the strategic goal. Also called effect

indicators, and in English, lag indicators or outcome measures.

Cause indicators: measuring the result of the actions that allow their achievement. Also

called inductors indicators, and in English, lead indicators or performance drivers.

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Financial analysis

'It is refers to the calculation of reasons to evaluate the past operational, present and

projected performance of the company, analysis of reasons is the most usual financial

analysis. They offer the measures relating to the operation of the company'. (Gitman

Lawrence, 2003)

It serves to give an idea of the current and future financial situation, as well as the general

terms ans conditions of the company and its results. It can be used as a tool to measure

the performance of the administration or to diagnose some existing problems in the

company.

Some of the indicators that will be used in this project will be:

- Profitability (ROI) it is an indicator that measures the rate of return produced by

a financial gain to the total capital, including all amounts borrowed and equity.

- Level of debt: it is an indicator that measures the degree of leverage used, and

indicates the participation of creditors about the company's assets. (Total

liabilities/ total assets).

- Ratio of liquidity: is an indicator that measures the ability of the company to

comply with its obligations in the short term. (Current assets/ current liabilities).

- Rate in the growth of sales: is an instrument of measurement of the main

variables associated with the fulfilment of the objectives and which in turn

constitute a quantitative and/or qualitative expression of what is meant to reach

a target specific laid, in this case that of the growth of sales.

Analysis of the chain value

According to Porter (1985) 'a theoretical model allowing to describe the development of

the activities of a business organization generating value to the end customer'.

So, its objective is maximizing value while minimizing costs, resulting in a margin

between what you agree to pay and the costs incurred for purchasing the offer.

Major activities follow a process where there is an input 'inputs' or raw materials where

it undergoes a process of transformation to become outputs or finished products.

The value chain is composed of three basic elements, which are:

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Primary activities

The primary activities are those activities directly involved in the production of the product

and its sale or delivery to the buyer, as well as post sale assistance. They are essential

in the transformation of inputs into outputs.

Support activities

Support activities are activities that support the primary activities. Its main objective is to

increase the efficiency of the primary activities and of the creation process of the added

value.

The margin

According to Porter (1985) 'the margin is the difference between the total value and those

total costs incurred by the company to develop activities generating of value'.

2.1.2 External analysis

Regarding the external analysis surrounding the strategic plan, it can be said that there

are many factors to analyse, and is therefore that it is necessary to set some context

that place under this plan.

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2.1.2.1 PESTEL

PESTEL analysis serves to define the context of a company through the analysis of a

number of external factors. If it is got to describe the current and future environment

based on these variables, it will be conducting an exercise of reflection that can give

some interesting clues about how the market will behave in the future.

Below is detailed in greater depth those details to study:

Political: are those factors associated with the political class such as: public

subsides, fiscal policy, modification of trade treaties, and so on, which may

influence the activity of the company in the future.

Economic: consist of analysing, studying and thinking regarding the current

and future economic, which may affect the construction of the strategic plan

in some way, for example: changes in the cycles of economic zone, new

political economics, variations in interest rates, inflation, and so on.

Socio-cultural: in this case, the interesting thing is to reflect on which can be

the elements of society that may affect the project carried out, it is thus

necessary to take into account issues such as: profile of the consumer eco-

friendly, changes of tastes or trends of consumers, the decline in the level of

income of the population, concern for health, tourism, and so on.

Technology: at this point we should be very cautious, since it is an aspect that

is difficult to control. Certainly the technological changes have always existed,

but not a dizzying speed in which are produced today. So therefore it is

interesting to study about all those factors that may affect the company, and

therefore to take into account issues such as: the inclusion of a

comprehensive system, the emergence of new technologies related to the

company, the emergence of new applications, the promotion of technological

development that will take the company to integrate these variables within

their strategy and even new forms of production and distribution.

Ecological: while at first this point may seem to affect only certain companies,

it is not true. For this reason it is interesting to be aware of policy changes

related to ecology and reflect on issues such as: regulation on the energy

consumption and recycling of waste, and so on.

Legal: this point refers to all those changes in the legal regulations related to

their work, which can result positive or negative. So, explore issues such as:

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laws against tobacco, rules and regulations governing food in Valencian

Community, laws for establishments engaged in the catering, and so on.

2.1.2.2 Porter's Five Forces' Model

Porter's Five Forces analysis' is a necessary task to complete satisfactorily the creation

of a strategic plan. This analysis leads to the respective join of the five forces that

determine the intensity of competition and rivalry in an industry, and as soon as more

attractive is this industry in terms of investment and profitability opportunities.

To perform a proper analysis of the Porter's Five Forces' model analysis, it is necessary

to note that 'there are two dimensions of the business environment:the ambient macro,

which includes forces that macro level have or can have implications on the behaviour

of the sector and the company in particular (forces of economic nature, political, cultural,

social, legal, ecological, demographic and technological); and the sector (group of

companies that produce the same type of goods or services), whose analysis are related

to the structural behaviour, studying the forces that determine the competitiveness in the

sector'. (Baena et al., 2003)

Figure 2: Porter's Five Forces

Source: Essential Tools For Management Accountants (2013)

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Porter's Five Forces are as follows:

Bargaining power of buyers or customers: refers to the bargaining power that

have consumers or customers. This section discusses the problem that occurs

when a client has a product that has one or more substitutes on the market, it

can cause that if buyers are well organized they can demand that quality of the

product will be always higher but at reduced prizes.

Negotiation power with the suppliers: refers to the capacity of negotiation with

providers have, i.e. the threat imposed on industry by the suppliers, either

because they have a high degree of concentration, by the characteristic of the

products that they provide, by the impact of inputs to the cost of the industry, and

so on.

Threats of the entry of new competitors: refers to the potential entry of companies

that sell the same type of product. It is one of the most important forces, since it

detects to the companies with the same economic characteristics or similar

products on the market. When a new company tries to enter in the sector, this

could have barriers to entry such as lack of experience, loyalty of the customer,

huge capital required, lack of distribution channels, lack of access to inputs,

market saturation, and so on. It is referred to entry barriers, 'any mechanism

whereby the expected profitability of a new incoming competitor in the sector is

lower to the profitability which are earning the competitors present in the

company'. (Dalmau and Oltra, 1997)

Threat of substitute products: refers to the potential entry of companies that sell

substitute products or alternatives in the sector. It refers to the products that may

affect in a very serious way to a company, so that they begin to be real, effective

and more cheaper that those which sell the initial company. This makes to this

company to lower its price, so it will produce a reduction in the incomes.

Rivalry among competitors: refers to the companies that compete directly in the

same sector, offering the same type of product. The rivalry defines the profitability

of a sector, i.e., while fewer competitors are in a sector, normally it will be more

profitable and vice versa.

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2.1.3 SWOT

According to Humphrey (1960) the SWOT is a study of the situation of the company,

analysing its internal features (strengths and weaknesses) and the external situation

(threats and opportunities) in a square matrix.

Weaknesses: they are aspects which limit or reduce the capacity of effective

development of the strategy of the company, they constitute a threat to the

organization and they must, therefore, be controlled and overcome.

Strengths: they are capacities, resources, achieved positions and, as a result,

competitive advantages that should and can be used to exploit opportunities.

Threats: is defines as all the power of the environment that can prevent the

implementation of a strategy, or reduce their effectiveness, or increase the risk

of it, or the resources required for its implementation, or also to reduce the

expected revenue or profitability.

Opportunities: is everything that can be a competitive advantage for the

company, either represent a chance to improve the profitability of the same or to

increase their turnover.

Strategic formulation

Once finished the first phase, strategic analysis, we will continue to the next phase called

strategic formulation. This phase is responsible for designing strategic options using the

information collected in the first phase and always staying faithful to the mission and

vision of the company, the strategies cannot go against the mission and vision. It

develops at different levels:

Corporate strategies: is the strategy that sets the direction of the company, it answers to

the following question: in which sectors should we compete?

Competitive strategies: according to Porter (1980) 'the competitive strategy takes

offensive or defensive actions to create a defensible position in an industry, in order to

face, successfully, to competitive forces and to generate a return investment policy' and

it responds to the question, how de we compete to differentiate us from the competition?

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2.2 Presentation of the Scorecard

The Scorecard is a tool that allows us to manage strategies and and is in charge of

'monitoring all the important elements of the strategy of a company, from continuous

improvement and alliances, to the team work and the global scale, which allows

companies to achieve excellence', (Kaplan, 2005). 'The main benefit of this tool lies in

allowing monitor the defined objectives and to carry out a monitoring of the global

strategy of the company in a centralized way' (Dávila, 1999 and Fernández, 2001).

The scorecard is based on the analysis of 4 perspectives:

Figure 3: Scorecard´s perspectives

Source: Cuadro de Mando Integral (2000)

2.2.1 The scorecard perspectives

The four perspectives must be connected and be coherent among them because they

as a whole form the scorecard. The financial result will be got if customers end satisfied

and they come back; it is got that customers were satisfied if internal processes are

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generated properly and it will be got improvements in internal processes trough

innovation and learning by members of the company.

Financial perspective (past)

It is a perspective that takes into account only the tangible assets and describes the

results of these in traditional financial terms. It is responsible for creating value for

society, summed up the consequences of past economic actions and it tries to maximize

the benefits and minimize the costs. This perspective answers the question, must we

satisfy to our shareholders?

The financial indicators are based on the accounts of the company and they show the

past results of the same. Below it can be seen examples of indicators that can be applied

to this perspective:

Financial Indicators

ROE, financial profitability

ROI, economic profitability

Per, earnings per share

Total debt

Net profit

Dividend per share

Employee benefit

Working capital

Table 1: Indicators of the financial perspective


The financial goals may differ depending on the life cycle in which a business is located.

The phases of the life cycle are:

Growth: companies that are in this phase normally may have loss and very low yield on

invested capital since it is at the beginning of its life cycle. The financial goal at this stage

that the company has is the growth of sales in market, group of customers and selected

regions.

Support: it is probably that most of the companies are in that phase of the life cycle. The

objectives that they try to get at this stage is to get excellent returns on invested capital

and to increase the market share.

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Harvest/Collection: it is the mature phase of the life cycle of a company. These

businesses already do not require large investments. The main objective of this phase

is to get the return of the cash flow to the company.

Examples of objetives that can be found through this perpective:

Increase in sales

Reduce the external financing

Reduce costs and Improvement of solvency

Ensure the liquidity

Increase of profitability, both economy as financial

Customers perspective (present)

To achieve this perspective we must answer to this question: what we should offer to our

customers?

Customers are the engine of business, without them there would be no business. The

company must know the needs of customers and to understand why they choose one

company or another one. For this reason a specific company must know the needs better

the competition. Some examples of needs that arise are: prize, quality of service or

product, the time a customer employ in a service, the image.

The perspective of customers shows the positioning of the company in the market

segments where it wants to compete in, and the perception of the value of the company

by the consumer.

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Some indicators of this perspective are:

Indicators from the customers

The market share

Sales per consumer

Earnings per consumer

Degree of satisfaction

Value of image to customers

Reputation level

Number of complaints and claims

Number of visits of the customers

Table 2: Indicators from the customers perspective


Perspective of internal processes (present)

The question that must be answered in this perspective is: in what business processes

must be excellent for the needs of the customers and the shareholders?

The activities of the company must be focused on getting the excellence in the production

of the product or services. The internal processes of the company affect directly on the

satisfaction of the needs of their customers as well as the attainment of financial goals.

This model encompasses three main processes:

Innovation: once the company investigates the latent customer needs, then creates

products or services to meet those needs.

Operations: where is produced and is delivered to customers the products and services.

After-sales service: finally, to meet and serve the customer after the sale or delivery of

the product or service.

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Figure 4: Model of the perspective of internal processes

Source: Own eleboration

The indicators which may occur in this perspective are indicators of internal processes:

Indicators of internal processes

Average age of machines

Number of suppliers

Cost of transport

Dead times

% of new products development

Process cycle time

Number of distributors

Number of patents

Table 3: Indicators from the perspective of internal processes


Learning and growth perspective (future)

To achieve this vision it is must be answered to the question, how must we develop our

skills to develop ourselves and to improve?

The learning and growth perspective is the latest that it is arisen in the Scorecard model.

People and technology are the resources which more important are at the time of the

creation of value in a company. It is a perspective wit future vision where innovation and

learning enable the growth and improvement of the company. The markets are dynamic

and with them our competitors and customers.

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Investments in equipment and in R&D are important but insufficient by itself. There are

three main categories of variables which influence in this perspective:

The capabilities of the employees: the ability to improve internal processes must derive

from employees who are near them and constantly of the customers.

The capabilities of information systems: the motivation and training of the employees is

not enough, it is also necessary to have information about customers, internal processes

and the financial results of their decisions.

Motivation, delegation of power (empowerment) and coherence of adjectives: employees

should be one more of the company and they must feel themselves as an important

piece, where they feel free to make decisions and act. This can keep a pleasant climate

to develop internal processes made in the company.

The indicators which can be found in this perspective are:

Learning and growt Indicators

Cost of training

Number of quality circles

Absenteeism

Index of communication

Index of incentives

Employee satisfaction

Index of quality in training

Number of suggestions per employee

Table 4: Indicators of the learning and growth perspective


Implementation of the strategy

It is the final phase of the strategic plan and it claims if the company has adequate

strategic controls in order that the previously formulated strategies will be success.

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3. DEVELOPMENT OF THE STRATEGIC PLAN

3.1 Internal analysis

3.1.1 History

The society 'EL MONTADITO S.L.' of Spanish nationality was established in 2009. Of

compliance with it was established in the article 2º of the statutes of the mentioned entity

has by social object 'restaurant of innovative food'.

Specifically, it is a restaurant for tapas and pinchos of very elaborated miniature haute

cuisine, served on slices of toasted bread or mini-sandwiches or mini-croissants.

Even being a small company, since it has 10 employees, it has managed to make strong

in a market as homogeneous as the catering sector. Such company is specialized in

high-end and high-quality montaditos for it has taken hold in the local territory and it has

differentiated itself with great ease from nearby shops even causing the closure of

companies given its high standing and their good treatment with customers, always with

the search for new products, new aromas or flavours to captivate guests. In a short time

it became a reference point for the nocturnal culinary life of the town of Benicássim,

where during the Summer month the terrace tales are crammed. At first it was a small

shop to a capacity crowd of about thirty people. In 2011, it acquired a second branch in

front of the original. The décor of the place is minimalist and very careful where blacks

and whites predominate and contrast the red windows.

'EL MONTADITO' is a company dedicated to the hospitality industry, it is located in

Benicássim in a privileged position since it is located in a central street of maximum

Summer influx. It is a place with an area of 110 m2.

3.1.2 Mission

Its mission is to want to achieve perfection in everything it does, providing excellent

service and offering guests warm with excellent relationship prize-quality, getting so the

customer will be always satisfied.

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3.1.3 Vision

'Stay on the line reached to this day there', be recognized and preferred at the local level,

as a business that provides services and products of excellence to its customers.

3.1.4 Values

Quality service, offering impeccable friendly customer.

Constant innovation in the offered products.

Constant commitment in the continuous improvement of the service.

Teamwork, valuing the contribution provided by each member of the teamwork.

3.1.5 Organization chart

Figure 5: Organizational chart of the Company

Source: Own Elaboration

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3.1.6 Working of the structure

The company 'EL MONTADITO S.L.' follows a model of mechanics bureaucracy with

functional departmentalization and in common with many of the principles of

Administration established by Fayol (1987) in his book.

The authority is concentrated in the hierarchical dome organization. The organizational

chart of the company does not have a great hierarchical development (three levels),

there is no a high number of middle management, the manager has a high horizontal

specialization. This means that management assumes many functions, as well as

coordinate and supervise the activities of other responsible departments directly.

The control range is limited, the chef and the manager are responsible for a limited

number of subordinates.

The kitchen's assistants have a unique upper hierarchical to contact (chef) and from

who receive orders while the waiters are in the same situation, they have a unique upper

hierarchical to contact with (boss). At the same time, both the chef and the boss must

give reins to the manager of the company. Each person knows their tasks, functions and

responsibilities.

3.1.7 Description of the jobs

The functions carried out by the employees are explained below:

1 Manager

He is the responsible for the whole restaurant.

He oversees the recruitment and entertainment of all employees.

He works closely with the chef and the boss.

He handles the financial side of the company, buying the necessary equipment, paying

the salaries of employees, paying products, light, water or the local rent.

He directed the purchasing management and relations with suppliers.

He attends to complaints and suggestions from customers.

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He takes decisions on the introduction of new products.

He develops de schedules.

1 Chef

He is the head ans total responsible for the operation in all areas related to kitchen.

Low to his orders he has different people with varied responsibilities in the kitchen.

He is the responsible for the creation, quality and consistency of the food, for the

realization of the 'montaditos', is taken an estimated time of 10 minutes.

He reports of performances carried out by assistants to the manager.

He checks daily cold rooms, refrigerators and sauces used the day before to check if

everything is in good conditions to be used during the day and report it to the manager.

1 Boss

He coordinates the staff.

He charges the bill to the customers and he farewells from customers.

He works closely with the manager.

He reports to the manager of the work done by the waiters.

1 Cleaning

They clean the local when it is closed.

3 Kitchen assistants

They help constantly to the chef.

They must keep the kitchen cleaned (sweeping, scrubbing the littering)

They drain and wash the dishes.

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They must keep the work are clean (cleaning surfaces, utensils)

3 Waiters

They are responsible for the cleaning of the tables.

They help in the accommodation of customers at the tables.

They have knowledge of the menu.

They take note of wine, drinks

They serve certain products to tables.

3.1.8 Offered service

It is a restaurant for 'tapas and pinchos' of very elaborated miniature haute cuisine,

served on slices of toasted bread. Having lunch or dinner in this place would cost around

15 or 20 Euros per person.

An example of the menu are the following 'montaditos':

Figure 6, 7, 8: Restaurant Food


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3.1.9 The technology of the company

'EL MONTADITO S.L.' despite of being a restaurant with a type of innovative creations

and which has had a great reception by the citizens, it does not have means of

dissemination and marketing, i.e., it has no website, a means of important dissemination

when presenting both the characteristics of the local and its products. Nor has mobile

applications, a medium that has become trendy in restaurants now.

On the other hand, the media technology boasts the restaurant internally are also scarce,

for example it does not have Wi-fi for customers, it has a very traditional system of orders,

and even it has no television.

3.1.10 Analysis of the chain value

The representation of the chain value that presents the company is:

3.1.10.1 Primary activities

The primary activities are divided into the following activities:

Inbound Logistics: this area is responsible for the reception and good storage, handling

and conservation to prevent losses of the inputs. As better inputs are used, less cost of

losses will have the company and this is translate into greater savings.

Kitchen: here is produced the transformation of raw materials into the finished product.

They are the activities of preparation and elaboration transforming food into dishes. It

also includes presentation, cleaning, maintenance and quality control processes.

Room: it includes activities relating to the service and delivery of the final product to the

client, such as the quality of the service provided, the degree of attention given to

customers, the organization carried out, cleaning and maintenance.

Marketing and Sales: all media that is used to promote the restaurant: the means used

are advertising, guides and hospitality.

Post-sales: are the means used to increase value added of the restaurant adjusting the

product and trying to innovate according to the customers' preferences.

27

3.1.10.2 Support activities

Support activities of the chain value are divided into the following activities:

Organization: these are activities that related tot he direction of the business, the

planning which is carried out and everything to do with the finances that the company

made.

Human resources: it is made up of aspects related to the personnel of the company,

such as the selection of the staff, their further training, retribution or motivation which

takes place in the restaurant.

Technology: they are activities that are aimed at the improvement of the processes,

using the modern technologies that are carried out for the conservation of foodstuffs or

information systems.

Purchasing: shopping are activities focused on searching for the best products in the

optimal possible conditions, there are also other activities such as logistics and the

relationship with suppliers.

28

3.1.10.3 The margin

The graphic representation of the value chain that presents the company is of the

following form:

Figure 9: Chain Value

Source: Own Elaboration from Porter (1985)

29

3.1.11 Financial analysis

In terms of the financial section, as it was previously mentioned it is necessary to analyse

it, with the aim of providing more information to the scorecard and in addition to making

us an idea of how is running the company. For this purpose, the following indicators have

been analysed:

The company's economic profitability: worth noting that 'EL MONTADITO S.L.' has a

41% of economic profitability, a performance that economic profitability could be

improved with a rotation of assets more efficient and with an increase of the margin on

sales, to the extent possible. This performance allows to 'EL MONTADITO S.L.'

comparison of profitability between companies of the same sector without the difference

of its financial structures affect to the ratio value.

Level of indebtedness of the company: this section should highlight that the analysed

company has a particularly high leverage with 55% level, this allows it to get a higher

return. On the other hand it should be noted that this high level of debt in relation to the

resource itself can compromise the solvency of the company in the event that the results

translate into losses and therefore this ratio will have to be paid special attention.

Ratio of liquidity of the company: this indicator also is important to take into account

to find out if the company has enough capacity to meets its obligations in the short term,

as well as 'EL MONTADITO S.L' has a ratio of solvency of 2.3% which means that it is

able to meet its obligations in short term. While this indicator is quite correct, it could be

said that with the addition of the scorecard the ratio would be seen clearly improved.

Rate of growth in sales of the company: this indicator shows us how efficient is being

the company when selling their products, so 'EL MONTADITO S.L.' has a 2% growth

over the previous year, a correct ratio but which is intended to improve the

implementation of the scorecard.

30

3.2 External analysis

3.2.1 PESTEL

The factors used to asses the market in which the business is located are:

3.2.1.1 Political factors

From the end of 2011 Spain has established a contractive economy fiscal policy focusing

on two fundamental and interrelated areas: fiscal consolidation and structural reforms.

The objectives of the reform were clear: boosting economic growth, job creation, and

improving business competitiveness, through the configuration of a tax system more

equitable that it entails a tax rebate. Fiscal policy developed up to that time had created

the conditions, with an incipient growth economy that needed to be shoring up and push

through a tax reform that put more resources into the hands of households and firms.

Since 21st December 2015, Spain is without a Government. Currently the Popular Party

is in office. A Government enters office after holding general elections, but also in certain

cases when starts loosing the confidence of Parliament or when resigns or dies the

President. The outgoing Government continued its work, with limited powers, until the

next Executive takes to possession.

The current political uncertainty that exists in Spain threatens the consumption and

investment. According to the general director of Economics and Statistics of the Bank of

Spain, Pablo Hernández de Cos, there are unknowns about how it will correct the deficit

in 2015 already that fiscal policies will have a negative impact on growth and will produce

biases downward.

A very important factor for the suitable financially performance would be the knowledge

of subsides available in the territory.

31

Figure 10: Incentives in Social Security matters for the promotion of youth

employment

Source: Bonificaciones/Reducciones a la contratación laboral (2016)

32

3.2.1.2 Economic factors

Currently the World economic situation is marked by a deep economic and financial crisis

that affects practically all sectors of activity. In the case of Spain, this crisis is still more

accentuated with very high rates of unemployment that reduce consumptions and a great

financial depression which harms the commercial activity of the companies.

According to the article 'indicadores de actividad del sector servicios de la Comunitat

Valenciana' issued by the Valencian Institute of Statistics index of general turnover of

the Comunidad Valenciana for the month of June 2016, has increased 4.5% over the

same month of the previous year. Nationally, the increase was 4.9%.

By sectors, the amount of turnover has increased in the Commerce sector (4.1%); the

trade to the retail has increased 5.4%. Among other services, there have been increases

in the sectors of transport and storage (0,1%), hospitality (6.2%), information and

communications (7,7%), professional, scientific and technical (17.6%) and administrative

activities and ancillary services (1.6%).

Figure 11: Turnover index: Comunitat Valenciana and Spain

Source: IVE (Instituto Nacional Valenciano de Estadística)

33

On the other hand, the index of general staff occupied in the Valencian Community for

the month of June in 2016 has increases 2.2% on the same month of the previous year.

Nationally, the increase was 2.3%.

By sectors, the employed personnel has increased in the trade sector (2.2%); in the trade

to the retail, busy staff has increased a 2.8%. Among other services, there have been

increases in the transport and storage sectors (2.1%), hospitality (4.0%), information and

communication (0.1%) and professional, scientific and technical (1.5%); there is no

variation in administrative activities and auxiliary services (0%).

Figure 12: Employed Personnel Index: Comunitat Valenciana and Spain

Source: IVE (Instituto Nacional Valenciano de Estadística)

34

3.2.1.3 Socio-cultural factors

According to José Aragonés, managing partner of T4 franchises 'we are experiencing a

big change in the dining options where innovation and differentiation are the two key

concepts. It is essential to adapt models to the needs of the consumer and the market.

Ahead of the user's demand is the key to success to surprise him with an offer that is

different from he had experienced until then'.

Organic food are more present in the world today. Therefore, it is important to know the

needs and the new organic customer profile.

Spanish ecological production boasts the largest area and one of the largest ecological

productive structures of the European Union and the World. In what refers to the surface

are 1.756.574 hectares and a number of 34.227 producers in the year 2012.

Figure 13: Evolution of the ecological production (1991-2012)

Source: “Evolución de la caracterización de la tipología y perfil

sociodemográfico del consumidor de alimentos ecológicos en España” (2014)

According to the study ' Caracterización de la tipología y perfil sociodemográfico del

consumidor de alimentos ecológicos en España' 26% of the population is aware about

the ecological products and consume them one a month. Within the 450 respondents, it

can be noted that there are more women than men, with an average age of 40 years,

with good education and good economic level.

The study detected that the main ecological products which consume this kind of

customers are fresh fruits and vegetables, from here other types of organic food are

35

introduced taking into account the needs of customers. In addition, consumers of organic

products are characterized by belonging to upper middle class, with an average age of

43 years, and 53% of the customers are women.

Internet and social networks are the best means to publicize the organic foods and

promote their consumption, wit the help of FEPECO (Spanish Federation of Companies

with Organic Products) intends to give awareness of the advantages of organic food, to

propose actions to be more competitive in markets and that these foods become

increasingly more to all consumers.

According to 'Global Food and Drink Market' in 2016 the interest for a healthier life will

be reflected in the production of alternative foods that provide new sources of protein to

replace traditional foods which will increase the consumption of natural products are

artificial preservatives. Companies that want to keep the consumers must to modify

production processes to remove any artificial component into foods.

Another factor to be treated is tourism, according to the article 'Encuesta de gasto

turístico' carried out by the National Institute is Statistics 'total spending of international

tourists visiting Spain in July increases a 7.0% compared to the same month of the

previous year while the average daily expenditure is located in €130, a 5.5% more than

in July 2015.

Major emitting countries in the level of spending are United Kingdom (with 21,7%),

Germany (12.8%) and France (9.6%).

Figure 14: Expenditure of tourists according to countries of residence

Source: INE (Instituto nacional de Estadística) (2016)

36

3.2.1.4 Technological factors

A software solution thought to bars and restaurants could realize an integral

management of the business in real time would be the use of an integrated system for

the management of restaurants.

The integral system for the management of restaurants is especially designed for those

restaurants in which the time is an important variable for its economy and for those that

simply wish to offer a better service to their customers, giving them a different way of

information and attention of their needs. Currently, the management of orders of the

customers, the transmission of the orders to the kitchen, the proposition of suggestions,

advertising and management of various business modules, it has been carried out in the

same way for many years. The use of this type of tool presents a broad margin of

improves in all of the daily processes that are performed in the attention and service to

customers of a restaurant.

It is a major modernization of the most important sector in Spain, as it is the catering

sector, which is the basis of reception of tourism, the motor of the national economy,

providing a greater functionality to the restaurants, perfecting their management,

reducing unnecessary time and therefore improving the service offered to customers.

New technology is the future of bars, hotels, restaurants and all kinds of catering

business. With the use of new technologies, i.e. use of tablets, Ipads, mobile

applications, it makes to improve the user experience, it improves waiting for service and

it improves the teamwork.

Would be possible with the use of these new technologies to raise sales?

According to the article '10 ways Technology Will Rock Your Dining Experience in 2014'

of the magazine which is about the world of business and finance called Forbes:

The use of applications to improve the speed of orders, touch screen so that

customers can make and customize their orders.

Table ordering, play, use Internet until paying the bill.

Platforms of digital games and entertainment, these applications are

designed to improve the customer's experience while waiting for their meal

because of offering digital games to have fun.

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Applications of customer's loyalty, apps for restaurants, where consumers

receive a reward for their loyalty by promoting interaction in social networks

a the same time.

Taking advantage of the current trend where customers love to upload photos

of all kinds in social networks, creating a proper application to do so. And how

a restaurant could get that a customer who is used to upload the photos to

Facebook or Instagram upload them to the restaurant's application? Easy,

giving them a prize. Each photo a customer uploads, it will have a series of

points that he could redeem for products in the store. It consists of a good

strategy of loyalty and social use.

Apps for the payment from their phones. Starbucks has been one of the

pioneers catering companies in using new technologies in restaurants.

3.2.1.5 Ecological factors

Environmental aspects have gained great importance in recent years, so it is very

important to take into account this section. Thus, the integration of environmental

management within the company can improve its competitiveness by reducing costs for

the company and the end user, to improve the eco-efficiency of the Organization, and to

generate new sources of income, as for example, by identifying waste that could be used

by other companies as raw materials.

The Comunidad Valenciana has a lot awareness with the environmental improvement

and it is for this reason that they have been launched initiatives as the Comprehensive

Plan to promote glass recycling in Summer, supported by more than 2700 bars of the

community.

Initiative awareness and provision of resources to the hospitality industry aims to

increase the recycling of glass in the Summer period, the time of year in which almost

one-third of the annual total is recycled. Summer is one of the moments of greatest

increase in tourism and consumption and, therefore, one of the key periods to work for

the preservation of our beaches and coastlines.

38

Another very important factor for environmental sustainability is the use of environment

friendly lighting, LED. The use of low consumption lamps gives rise to a lower

consumption of energy, low maintenance cost, a longer durability so it is longer its useful

life and a reduction of light pollution. They are manufactured with recyclable materials,

without containing polluting elements such as mercury and it can reach until a 40% of

saving energy.

3.2.1.6 Legal factors

At this point it is going to be analysed the laws that affect the establishment of our

business.

In general terms, the restoration tourist settlements (bars, restaurants and café) are

basically regulated in terms of health, hygiene, safety and disabled accessibility.

Although there are state laws, the truth is that the autonomous communities have

transferred competencies in management of tourism, and only in its absence, will govern

the first:

State regulations

The rule to which is subjected the activity of the restoration at the State level is

the order of March 17, 1965 (BOE on March 29, 1965), which approves the

tourist restaurant management, Ministry of information and tourism. This part of

the regulation has been amended by the order of 29th July 1978 (BOE of 19th

July 1978), the Ministry of Commerce and tourism.

The legislation contains:

o Definition of restaurants and it creates exclusions.

o It regulates competences (today replaced by provisions on organic

competencies of the autonomous communities).

o It orders the approval of establishments.

o It establishes regime of prices, advertising of dishes, billing on what has been

presenting, autonomous dispositions which come to replace in their

respective territories the present rule regarding this matter.

o It regulated the categories and their requirements.

Act 13/1982 of 7th April, Social Integration of the disabled people.

Royal Decree 3484/2000, of 29th December, establishing standards of hygiene

for the preparation, distribution and trade of prepared food.

39

Royal Decree 475/2007, of April 13th, whereby approves the national

classification of economic activities in 2009 (CNAE-2009). The CNAE-2009 went

into effect on January 1st, 2009, and is classified by the restaurants and food

stalls with the code 5610.

Law 42/2010 of 30th December (anti-tobacco law), which modifies Law 28/2005,

of 26th December, health measures against the tobacco and regulating the sale,

supply, consumption and advertising of tobacco products. It is a reform that

directly affects the dinning options, banning smoking in all public closed spaces,

including bars, restaurants, and other entertainment venues.

Autonomous Normative

Decree 7/2009, 9th January, of the regulatory Council of settlements of

restoration of the Comunidad Valenciana. The legislation contains:

o Restoration companies will have consideration of places open to public and

its access will be free, without prejudice that may be established conditions

for admission in accordance with provisions by the Decree 197/2008 of 5th

December, the Council, which regulated law, the reserve and the service for

admission to establifhments intended for the realization of show public and

recreation activities, or standard that will replace it.

o Those establishments that disposing of kitchen and dining room with

independent, with or without bar, offer tot he public, by means of prize, food

and beverage to be consumed at the same local. These establishments must

have dishes and drunks menu.

o Menus of drinks and dishes must be legible and accurate in the presentation,

and shall not contain erasures or manipulations that may lead to confuse the

customer.

Law Decree 2/2012, on 13th January, the Council, on urgent measures to

support entrepreneurship and to entrepreneurs, micro-enterprises and small and

medium-sized enterprises (SMEs) in the region of Valencia.

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3.2.2 Analysis of Porter's Five Forces Model

In this part of the analysis it is going to be described the five Forces of Porter:

3.2.2.1 Bargaining power of customers

In the case of the place analysed in this work, the seasons of the year will influence

somehow in this local, so that in Summer the company will have a high-powered

negotiator against customers, because of the location of the company (Benicássim),

there is much influx of tourists in Summer, therefore this large amount of tourists will

allow the business to enjoy much customers, in other words, the demand at this time is

enough to cover all the existent offer.

On the other hand, in Winter the situation changes dramatically, since the influx of

tourists diminishes significantly and therefore the business begins to have fewer

customers and with it, there is more competition between them. So, the negotiation that

is set in this period by the customers, is greater, since they will have more variety choice,

in other words, a this stage, the offer will be greater than the demand.

3.2.2.2 Bargaining power of suppliers

The company has a high degree of bargaining power against suppliers in terms of main

food used by 'EL MONTADITO S.L.' which is the bread, since it is a product which has

many suppliers in the territory. With regard to other suppliers, the company negotiates

with a number of suppliers to get this, so that the bargaining power is balanced between

the two sides.

3.2.2.3 The threat of new competing entrants

From 2008, i.e., the beginning of the crisis in Spain, the hospitality industry is the sector

that most high self-employed record has experiences. A sector where you could easily

enter if you have product of higher quality than the existing ones, or lower prizes.

Currently, the generated benefits in Catering are not as high as in previous years,

therefore new entrepreneurs do not have too much initiative to enter into the sector. If

someone decides to be entering to the catering sector he would not find strong barriers

to entry since it is a sector where investment is relatively low compared to other sectors

and there is no need for specific technology to develop the operations of the company.

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3.2.2.4 Threat of substitute products.

It can be found 2 kinds of preference in the consumers. On the one hand is people that

wants to have dinner or lunch where the main competitors could be any other restaurant

that offers a service of dinner, it can be highlighted the different types of food as the

Chinese food, kebabs; and on the other hand it could be find people who wants to eat

something specific, for example something made with bread, and here it can be

highlighted the sandwiches. An example of substitute products would be to open a

business of sandwiches such as Pans&Company or Panetto.

3.2.2.5 Rivalry between competitors.

In the catering sector we have a sector where the number of competitors that exist is

very very high. The emergence of new firms has led to a drop in prizes. It is a sector

which is in fade of mature., because it is carried out an increase of offers that have come

to better adjust the needs of the customers. Therefore, there is a high degree of rivalry

between competitors. This has led to the catering companies to think about strategies in

order to improve its position in the market.

3.3 SWOT

Once done both internal, external, financial and value chain analysis, the next step is to

perform a SWOT analysis taking the previously seen data.

Weaknesses

o Lack by the company of different means of communication, in which it could

be find the lack of a website or a proper application by the company.

o Lack of a comprehensive system for the management of the restaurant to

offer a better service to its clients, providing them with a different form of

information and addressing their needs.

o Since the chef is who creates the 'montaditos', there is a lack of experience

of the kitchen helpers in the creation of them.

o Lack of vegetarian food.

42

Threats

o Uncertainty of the current political.

o Since people are more interested in healthy food, there are new changes in

the food habit.

o Emergence of new restaurants with home delivery.

o High concentration of restaurants in the area.

o Few customers in Winter because of a reduction of tourism.

Strengths

o Specialization in 'creative cuisine'.

o Privileged position by being located in a tourist place.

o High bargaining power with suppliers of its main product.

o To survive and even to increase the business in times of crisis.

Opportunities

o Incentives for employment of young people.

o Increase of turnover in Summer due to tourism.

o Adapt to the new profile of the eco-friendly consumer.

o New ways of distributing the product.

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Figure 15: SWOT


Strenghts

• Specialization in 'creative cuisine'.

• Privileged position by being located in a tourist place.

• High bargaining power with suppliers of its main product.

• To survive and even to increase the business in times of crisis.

Weaknesses

• Lack by the company of different means of communication

• Lack of a comprehensive system for the management

• Lack of experience of the kitchen helpers in the creation of the "montaditos"

• Lack of vegetarian food.

Opportunities

• Incentives for employment of young people.

• Increase of turnover in Summer due to tourism.

• Adapt to the new profile of the eco-friendly consumer.

• New ways of distributing the product.

Threats

• Uncertainty of the current political.

• New changes in the food habit.

• Emergence of new restaurants with home delivery.

• High concentration of restaurants in the area.

• Fewer customers in Winter

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3.4 Strategic objectives

Taking into account the Scorecard methodology, then is indicated the different strategic

objectives of each perspective.

Figure 16: The strategic objectives of 'MONTADITOS S.L.'


Financial Perspective

• To reduce the external funding

• Sales increase

• To reduce costs

Customers Perspective

• New customers

• Customers' satisfaction

• Expand customers segments

• To increase the degree of customers loyalty

• Creating products for gluten free people

Perspective of internal processes

• To create distribution networks

• To reduce processing time

• To increase the quality of the products

Learning and growth perspective

• To increase the training activities

• To increase the employee satisfaction

• To implement a comprehensive management system

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3.5 Description of the proposed objectives

3.5.1 Financial perspective

To reduce the external funding: objective that consists in decrease the financial

resources that the company gets of external form to finance the business. As

decreasing the funding, the company will reduce those interests that it has with

the banks that which will get to a long term saving.

Sales increase: the aim in this section will be to increase the sales of 'montaditos'

specifically it intends to create a web page for the company, which will provide a

variety of information (existing 'montaditos', new 'montaditos' which go created,

types of bread, vegetable 'montaditos' and so on) on products traded on the local.

To reduce costs: the goal at this point is to reduce the costs of raw materials and

more specifically in the bread, the main product of 'montaditos', through the

preparation of this item directly from the company and not by a third party at is

currently being done.

3.5.2 Customers perspective

New customers: the objective will be to increase the number of new customers,

through the incorporation of new marketing mechanisms that allow to spread in

a more extensive advertising the product. To promote the business of all the

external websites that have advertising and reviews on restaurants and using

existing networks, such as Facebook, Twitter, Snapchat.

Customers' satisfaction: this objective is essential, since once created the

website for the company, it will be carried out surveys in it where the customer

estimates the experience that had with food, the service, the quality-prize in the

local. And finally with the help of this information 'EL MONTADITO S.L.' will be

able to to make improvements which satisfy the customers.

Expand customers segments: the proposed objective is to get new customers

creating new ecological 'montaditos', and as they are consumers on the rise in

this sector, who worried about the health and fresh of food.

To increase the degree of customers loyalty: objective which intends to increase

the share of fidelity with the help of a creation of a mobile application. Using this

technology the company can connect better with customers showing the menu in

depth with photos and descriptions, to guide with GPS to customer until the local,

46

to publicize the history of the local, its facilities with photos and videos.

Creating products for gluten free people: because of the segment of people not

covered by the company, this objective is to provide gluten free products to

people who have intolerance to gluten from wheat, barley, rye and oats. In this

way, it could be increased sales and to cover better the market by satisfying the

needs of people.

3.5.3 Perspective of internal processes

To create distribution networks: since it is a sector where depending on the

season of the year, it is billed differently, in Summer it will have more billing while

in Winter it lows considerably. The objective is to link up with a company like just

eat where the company could distribute its 'montaditos' to houses. Therefore this

action will increase the sales in the time with less is billed.

To reduce processing time: the objective at this point will be to increase the

working efficiency of the company through a continuing education of its workers.

Thus, for example it is intended to form kitchen assistants so that they are able

to carry out the development of new 'montaditos', to waiters so that they can

offer one faster service but equally efficient to customer and even to the manager

so that they can better adapt to all changes currently occurring.

To increase the quality of the products: using major quality of raw materials, the

'montaditos' will offer to guests a distinctive taste of satisfaction. Therefore the

customer will return to enjoy these flavours.

3.5.4 Learning and growth perspective

To increase the training activities: to make a business work in a good way, the

employees must be well formed. Because of this, investing in workers is an

important objective for the company. On this way the image of the local will be

not tainted by the lack of training of their employees.

To increase the employee satisfaction: necessary objective to create a habit of

optimism and camaraderie, which create enthusiasm ad comfort in the

workplace.

To implement a comprehensive management system: in this last objective which

is intended is to improve the technological system of the company through the

implementation of a comprehensive management system, i.e., to incorporate

47

new electronic devices that entail an improvement in the company, for example

to improve the efficiency in the service or to create more customer's convenience

and entertainment while waiting the service.

3.6 Strategic Map

Figure 17: Strategic Map


48

3.7 Strategic indicators

The following table shows the indicators established for each proposed objectives

Perspectiva Objetivo Indicador

Financial To reduce the external funding Total Debt

Financial Sales increase Index of growth in sales

Financial To reduce costs Operations Result

Customers New customers Number of customers

Customers Customers' satisfaction Assessment of image to

customers

Customers Expand customers segments New customers

Customers To increase the degree of

customers loyalty

Number of downloads

Customers Creating products for gluten free

people

Sell of gluten free products

Internal Processes To create distribution networks Number of orders

Internal Processes To reduce processing time Cycle of processing time

Internal Processes To increase the quality of the

products

Level of satisfaction

Learning and

Growth

To increase the training activities Training costs

Learning and

Growth

To increase the employee

satisfaction

Number of sastisfied employees

Learning and

Growth

To implement a comprehensive

management system

New tecnology of information

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Table 5: Strategic Indicators


Once established indicators for each objective, each of them will be detailed by its

corresponding tab.

Financial perspective

Strategic goal: To reduce the external funding

Indicator: Total Debt

Review: Annual Unit of measure: % Method of calcultating: Debt year t/ Debt

year t-1

Action: To negotiate the interest rate with the bank

Table 6: Objetive 1


Strategic goal: Sales increase

Indicator: Index of growth in sales

Review: Annual Unit of measure: % Method of calcultating: Initial year sales t/

Initial year sales t-1

Action: Creation of an own webpage

Table 7: Objetive 2

50


Strategic goal: To reduce costs

Indicator: Operations Result

Review: Annual Unit of measure: % Method of calcultating: Diference of first

year cost – final year cost

Action: To make the main product of the company, in this case the bread

Table 8: Objetivo 3

Customers perspective

Strategic goal: New customers

Indicator: Number of customers

Review:

Quarterly

Unit of measure:

Number

Method of calcultating: Diference between

quarter initial – Quarter final

Action: To become more involved in social networks with constant information for

customers

Table 9: Objetivo 4


Strategic goal: Customers' satisfaction

Indicator: Assessment of image to customers

Review: Six-

month

Unit of measure: % Method of calcultating: To measure food

score, price, quality/price about 10

Action: To monitor surveys through own website of the company

Table 10: Objetivo 5

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Strategic goal: Expand customers segments

Indicator: New customers

Review: Six-

month

Unit of measure:

Number

Method of calcultating: Number of sold units

Action: Creation of new ecological “montaditos”



Strategic goal: To increase the degree of customers loyalty

Indicator: Number of downloads

Review:

Quarterly

Unit of measure:

Number

Method of calcultating: To measure

application downloads

Action: Creation of an own mobile application for the company



Strategic goal: Creating products for gluten free people

Indicator: Sell of gluten free products

Review:

Quarterly

Unit of measure:

Number

Method of calcultating: Produced quantity –

Sold quantity

Action: To provide this kind of food


52

Internal processes perspective

Strategic goal: To create distribution networks

Indicator: Number of orders

Review: Monthly Unit of measure:

Number

Method of calcultating: Number of

orders received

Action: To register in “just eat”



Strategic goal: To reduce processing time

Indicator: Cycle of processing time

Review:

Quarterly

Unit of measure:

Number

Method of calcultating: Time to créate

“montaditos”

Action: To train kitchen assistants



Strategic goal: To increase the quality of the products

Indicator: Level of satisfaction

Review: Annual Unit of measure:

Number

Method of calcultating: To carry out a survey

on the quality of the products

Action: To improve the quality of raw materials


53


Strategic goal: To increase the training activities

Indicator: Training costs

Review: Annual Unit of measure:

Number

Method of calcultating: Cost of training

Action: Targeting employees to training



Strategic goal: To increase the employee satisfaction

Indicator: Number of sastisfied employees

Review:

Quarterly

Unit of measure:

Number

Method of calcultating: Mailbox of

suggestions

Action: To create an optiomal workplace



Strategic goal: To implement a comprehensive management system

Indicator: New tecnology of information

Review: Six-

month

Unit of measure:

Number

Method of calcultating: Cost of the new

tecnology

Action: To incorporate new electronic devices


54

3.8. Balanced Scorecard of “MONTADITOS S.L.”

Once the BSC is implemented, it would be analysed if the indicators goals are achieved

by doing the proposed actions. Through the BSC, the strategies development can be

followed and will be able to measure it. The entire organization should be be involved in

achieving the objectives, propose actions to avoid the mistakes of the past and look for

opportunities for improvement in future.

Perspective Goal Indicator Action Now Future

Financial

perspective

To reduce the

external funding Total Debt

To negotiate the

interest rate with

the bank

55% 50%

Financial

perspective Sales increase

Index of growth

in sales

Promotion

Creation of

webpages

2% 4%

Financial

perspective To reduce costs

Operations

Result

To make the

main product of

the company

70% 65%

Customers

perspective New customers

Number of

customers

Promotion of

social networks 0 20

Customers

perspective

Customers'

satisfaction

Assessment of

image to

customers

Surveys in the

website 0 85%

Customers

perspective

Expand

customers

segments

New customers

Creation of new

ecological

“montaditos”

0 10

Customers

perspective

To increase the

degree of

customers

loyalty

Number of

downloads

Creation of an

APP 0 50

55

Customers

perspective

Creating

products for

gluten free

people

Sell of gluten

free products

To provide this

kind of food 0 10

Internal

Processes

To create

distribution

networks

Number of

orders

Register in

“justeat” 0 25

Internal

Processes

To reduce

processing time

Cycle of

processing time

To train kitchen

assistants 10 9

Internal

Processes

To increase the

quality of the

products

Level of

satisfaction

Improve the

quality of raw

materials

7

over

10

8

over

10

Learning

and Growth

To increase the

training

activities

Training costs Go to training

courses 0

2000

euros

Learning

and Growth

To increase the

employee

satisfaction

Number of

sastisfied

employees

To create an

optimal

workplace

0 10

Learning

and Growth

To implement a

comprehensive

management

system

New tecnology

of information

Incorporate new

electronic

devices

0 5000

euros

Tabla 20: Balanced Scorecard of “MONTADITOS S.L.”


56

4. CONCLUSIONS

The objective of this final degree project has consisted in the elaboration of a strategic

plan for a SME based on the used of the scorecard. Tool that has served to help to the

company to place in at each time, allowing it to know where is located and enabling the

correction of those aspects which are required.

The company has been analysed to identify major internal and external factors for which

was affected by and which could constitute weaknesses, strengths, threats or

opportunities for the business. Subsequently it has been elaborated the SWOT

corresponding to the study conducted on the company. Despite the threats present in

the environment, it has been also found opportunities that the company should use to

expand their activities and to increase its sales.

Once the SWOT has been obtained, it has been raised the different objectives that

conform more to the needs of the company and it has been proceeded to the

development of the scorecard. Having detailed the proposed objectives with their

perspectives, the next step has been to fix its indicators and to elaborate the action plan

to be followed.

The company must evolve to new horizons using the technology and the motivational

employees as the aim to achive a growth of the firm. In one hand, motivation of

employees plays a key role in the achievement of goals and objectives. A motivated

workforce will make the firm be more productive. By the other hand technology is the

most important in the society, owing the application of technology lead to the evolution

of newer and faster modes of transport and communication thus firms should take

advantage of it to increase theyre growth of companies.

57

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servicios de la Comunitat Valenciana (base 2010). [Online] Available at:

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es-un-plan-estrategico/ [Accessed 10 April 2016].

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Así son los nuevos modelos de restauración en franquicia. T4 Franquicias, [blog]

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especializacion-y-una-oferta-cada-vez-mas-gourmet-asi-son-los-nuevos-

modelos-de-restauracion-en-franquicia/ [Accessed 20 April 2016].


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60

7. FIGURES AND TABLES

FIGURES PAGE

Figure 1: The Strategic Management Process 7

Figure 2: Porter's Five Forces 12

Figure 3: Scorecard´s perspectives 15

Figure 4: Model of the perspective of internal processes 19

Figure 5: Organizational chart of the Company 22

Figure 6, 7, 8: Restaurant Food 25

Figure 9: Chain Value 28

Figure 10: Incentives in Social Security matters for the promotion of

youth employment

31

Figure 11: Turnover index: Comunitat Valenciana and Spain 32

Figure 12: Employed Personnel Index: Comunitat Valenciana and

Spain

33

Figure 13: Evolution of the ecological production (1991-2012) 34

Figure 14: Expenditure of tourists according to countries of residence 35

Figure 15: SWOT 43

Figure 16: The strategic objectives of 'MONTADITOS S.L.' 44

Figure 17: Strategic Map 47

TABLES PAGE

Table 1: Indicators of the financial perspective 16

Table 2: Indicators from the customers perspective 18

Table 3: Indicators from the perspective of internal processes 19

Table 4: Indicators of the learning and growth perspective 20

Table 5: Strategic Indicators 48

Table 6: Objetive 1 49

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Tabla 20: Balanced Scorecard of “MONTADITOS S.L.” 55

Documents

STRATEGIC PLANNING AND MANAGEMENT OF SMES